Midrange earners stand to see meaningful savings, too. A warehouse supervisor earning $60,000 with $10,000 in overtime could shave a couple thousand dollars off their federal tax bill. A hotel bartender making $45,000 plus $5,000 in tips could get back all the federal taxes withheld from their tips.

More states may weigh in on the “no tax on overtime” debate. State legislatures will meet throughout the year, and overtime income could be on the slate of bills proposed. More than just your federal tax bill could be on the line, so stay tuned.

The One Big Beautiful Bill (“OBBB”), signed by President Trump on July 4, 2025, allows workers (subject to dollar and income limitations) to

President Donald Trump’s sweeping tax and spending law, known as the “One Big Beautiful Bill Act,” will make permanent large tax cuts from the president’s first term. And it makes good on a campaign

Millions of Americans can now keep more of their overtime earnings courtesy of language included in President Donald Trump’s “Big Beautiful Bill.”

Questions remain about how elements of the massive tax-and-spending bill signed by the President last week will play out. But here are some

The "Big Beautiful Bill" did not actually eliminate taxes on tips, overtime, or Social Security, but many people will be able to claim new income tax deductions that will reduce federal taxes on such income.

The law covers people who work overtime under the Fair Labor Standards Act, which requires time-and-a-half pay for hours worked over 40 in a week. Many workers — including supervisory and professional workers, the self-employed and independent contractors — do not qualify for overtime and thus would not benefit from the provision.

Under the bill Trump signed into law on July 4, the U.S. Treasury Department must publish a list by Oct. 2 of occupations that qualify for tax-free tips. The department is also expected to publish guidance on how to report tips and overtime pay, and what documentation will be required.

Several provisions of Trump's bill are poised to be retroactive to 2025 or take effect in 2026, and they may shift how Americans approach tax planning.